Question
You want to estimate the cost of equity of firm A using CAPM. Firm A has a beta of 1.3. Assume that the return on
You want to estimate the cost of equity of firm A using CAPM. Firm A has a beta of 1.3. Assume that the return on the market portfolio is 8.52%, and the risk-free rate is 3%. What is the cost of equity of firm A?
Group of answer choices
14.21%
12.11%
11.74%
10.17%
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
3rd Edition
0471375942, 978-0471375944
